The oil rig count drops sharply in North Dakota – regulator

Rigs drilling for oil have fallen to the lowest in more than a year in September, the North Dakota Industrial Commission said on Wednesday.

Operators have been consistently seeking to cut costs and increase efficiency, which has lead to this steep oil rig count decrease.

The commission’s data has shown that the number of oil-focused rigs in the Midwest state has fallen to its lowest level since July 2011 – dropping to just 194 this month.

The all-time high of 214 was set in May, which sees this September falling 11 per cent behind.

As costs and regulatory concerns continue to rise, the nation’s largest oil find in a generation may be compromised.

Output from the Bakken and Three Forks prospects set North Dakota as the second-largest oil-producing state in the country this year.

Lynn Helms, director of the state's Department of Mineral Resources, voiced her concerns over this dip in a monthly note.

"The combined effect of several factors has led to a noticeable slowing of activity and production growth."

She also expressed her concerns about the uncertainties over regulations on the fracking, or hydraulic fracturing, drilling technique.

Hydraulic fracturing is the propagation of fractures in a rock layer, as a result of the action of a pressurized fluid. Fracking releases petroleum, natural gases and other substances for extraction. This is done is by drilling intro reservoir rock formations.

Obama administration have had a drive to regulate fracking on federal lands, however there are many uncertainties over the federal bid. Critics argue that the move will prohibit growth due to an increase in costs.

The biggest critics, and those that would be most affected, are states that sit on large shale oil and gas reserves – substances extracted by fracking.

North Dakota Republican senator John Hoeven, along with Alaska senator Lisa Murkowski, sympathise with these state’s concerns, and assure inhabitants that a system will be put in place to regulate fracking.

Posted by Claire Manning